Does an Insurance Quote Affect Your Credit Score
No, getting a car insurance quote doesn't affect your credit score, because insurers use a type of check that isn't recorded as an inquiry.
Comparing five quotes before buying a car
You found the car, agreed on a price, and now you're getting quotes from several insurers before you drive it home. Each one asks for your information, including your date of birth and address, and some ask if they can look at your credit history to help set your price. You say yes to all of them because you want the best rate before you commit.
A few weeks later you check your credit report out of habit, maybe because you're also thinking about financing the car. Nothing from the insurance quotes shows up. Not one of the five checks appears as an inquiry, and your score hasn't moved because of them. The only thing that would show up is if you later apply for a car loan, which is a separate kind of check entirely.
Why does checking my credit affect my insurance price at all?
Insurers in many states are allowed to use your credit history as one factor in pricing, alongside things like your driving record and the car itself. The reasoning insurers give is that people with certain credit patterns file claims at different rates on average, so it becomes part of the pricing formula the same way your age or location might.
This isn't universal. Some states don't allow credit to be used this way at all, and insurers that do use it weigh it differently from one another. If you're not sure whether it's a factor where you live, ask the insurer directly when you get your quote, since they have to tell you if it affected your price.
Since checking your credit costs you nothing, get quotes from several insurers now and compare the real prices.
Letting insurers check your credit history
If you do
The insurer uses a soft pull, which doesn't appear on your credit report or affect your score. You get a quote that reflects your actual pricing factors, including credit where it's used, so the number you see is close to what you'd actually pay if you buy the policy.
If you don't
Some insurers will still quote you, but may assume less favorable credit information or ask you to confirm details later. The quote you get might change once underwriting is complete, so you could end up comparing a number that doesn't hold up.
What actually happens when an insurer checks your credit
- It's a soft pull Insurers use a type of credit check that doesn't appear on your report and isn't visible to lenders or other companies. You don't need to worry about it stacking up alongside other inquiries.
- Not the same as a loan check If you're financing the car, the lender's credit check is a separate, different kind of inquiry that can affect your score. Keep that process separate in your mind from getting insurance quotes.
- Rules vary by state Some states limit or ban the use of credit in setting insurance prices. Ask the insurer whether credit is a factor in your state if you want to understand your quote.
- Saying no is usually allowed You can typically decline the credit check and still get a quote, though it may be less precise. Ask what happens to your price if you opt out before deciding.
- Multiple quotes don't add up Getting quotes from several insurers in the same window doesn't compound or harm your credit. There's no reason to limit how many you compare.
Shopping for insurance quotes never touches your credit score, so compare as many as you want freely.
